World number one Rory McIlroy is taking time away from golf early next year to better deal with the multi-million dollar legal dispute he has with his former management company.

The Northern Irishman took the decision after lawyers representing himself and the Dublin-based Horizon company failed to reach an out-of-court agreement settling a complex contractual dispute.

"I'm going to need time away from tournament golf to prepare for the trial over my legal dispute with Horizon Sports Management," said McIlroy via his new management company.

"The court-directed mediation process failed over the weekend to resolve the issue."

The hearing is set to take place in February and McIlroy has already opted to withdraw from two top tournaments in Shanghai at the end of this month and early next -- the BMW Masters and World Golf Championships-HSBC Champions tournament.

McIlroy signed up with Horizon in late 2011, only to begin proceedings against them almost a year ago, alleging the contract to be "unconscionable" due to "excessive commissions".

Via a counter lawsuit, Horizon, instrumental in McIlroy's lucrative five-year contract with Nike, are citing breach of contract and loss of future commissions.